BGE might slash jobs next year

No layoffs planned, company said in June deregulation talks

More firings in 3-year plan

Rate cut, competition blamed for projected possible dismissals

July 29, 1999|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

One month after Baltimore Gas and Electric Co. officials said there were no plans to reduce its work force as a result of deregulation, the utility said yesterday that it is considering cutting between 250 and 350 jobs next year.

In addition, BGE said it will draft a three-year plan to help it project further possible job losses in 2001 and 2002 as it anticipates frozen electric rates, new competition and higher expenses.

While the company estimates 6 percent to 9 percent of its work force of 3,900 in its utility operations group could be cut next year, "any numbers are uncertain as we're just beginning the process," said Frank O. Heintz, BGE executive vice president for the group.

FOR THE RECORD - An article in July 29 editions about possible job cuts at Baltimore Gas and Electric Co. reported that Frank O. Heintz, BGE's executive vice president for the utility operations group, said cuts would affect administrative employees as well as crew workers. In fact, BGE had not decided which departments and jobs might be affected.
The Sun regrets the error.

A more precise figure for possible job losses next year should be known by October, but the prospect of layoffs won't be clear until next year, Heintz said.

The company plans to look for opportunities for attrition and retraining, then evaluate the possibility of voluntary severance, and then consider layoffs, the spokesman explained.

Heintz said he believes 350 layoffs would be the "upper limit." He informed employees of the possible job cuts last week. Constellation Energy Group, BGE's parent company, has about 7,000 workers.

Heintz said the possible cuts next year would be in the company's distribution business, which will remain regulated. The cuts would apply to administrative employees as well as crew workers who help deliver gas and electricity to customers.

After presenting a proposed settlement, which includes a 6.5 percent residential rate cut, to the Maryland Public Service Commission June 29, company officials said the utility had no plans to cut jobs as a result of restructuring to compete.

"We were not informed that any of the negotiations would result in job cuts," said Michael J. Travieso, the state-appointed People's Counsel representing consumers. "That's a surprise to us."

Job losses at BGE, he said, would raise concerns about the utility's reliability and quality of service for consumers.

"With a rate freeze, one of the ways for a company to attempt to deal is to reduce expenses," Travieso said. "And if they try to reduce expenses, the quality of service may be affected.

"Consumers will be able to tell if the company doesn't have enough people to, for example, respond to service calls," he said.

Richard Crawshaw, a representative with the International Brotherhood of Electrical Workers in Baltimore, which has been trying to organize BGE workers for nearly five years, said it was not fair for the company to consider job cuts because of the residential rate reduction.

"BGE offered that rate cut to the PSC. It wasn't mandated, and now the company is trying to use it as a reason for the layoff," he said.

The IBEW, which has lost several elections at BGE, started another organizing campaign in May, Crawshaw said. There could possibly be an election at the end of the year, he said.

BGE last cut jobs in 1997, when it trimmed 100. In two previous rounds in 1992 and 1994, BGE reduced its work force by a total of more than 900 employees, largely through early retirements and voluntary severances.

Heintz said the company has to look ahead to competition in providing power as well as billing and metering, set to begin in July 2000 and January 2002, respectively; the pending 6.5 percent residential rate cut, which would remain in effect for six years; and BGE's contribution to a universal service fund, a pool of money to help low-income customers pay for power.

BGE plans to offset the expected losses by controlling costs in the distribution side of its business, while expanding power plant holdings and marketing electricity on the wholesale market.

"With industry restructuring going on across the country, utilities also have to restructure and redefine themselves for the new competitive industry of the future," Heintz said.

"Employees understand that we have to look carefully at our cost structure," he said. "We're looking throughout the organization for opportunities for achieving productivity gains."

Heintz said BGE anticipates that the IBEW will continue its efforts to organize workers.

"In periods of change, change creates uncertainty, and I think that creates a circumstance that can be used by union organizers to reach out to employees," Heintz said. "But in the last two votes, employees have preferred to stay union-free."

The IBEW held two elections in its efforts to organize BGE workers under Local 1900 in Camp Springs. The union garnered 29 percent of the vote in 1996, but IBEW and BGE agreed to set aside the results to settle charges that the company interferred with the election.

In a second election in October, the union garnered 48 percent of the vote. A dispute arose about the eligibility of nearly 700 workers to vote, and again, the union charged BGE with interfered with the election.

The National Labor Relations Board has not set a hearing schedule to settle the two disputes.

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